Sept. 21 (Bloomberg) -- Gasoline rose, narrowing its losses for the week, on speculation that stimulus from central banks will improve economic growth and boost demand for fuel.
The motor fuel climbed 1.3 percent after the Financial Times reported that Spanish and European Union officials are working on plans to trigger bond purchases by the European Central Bank.
“There is expectation that there will be continued quantitative easing from central banks around the world to improve economic prospects,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. There is also “optimism that Europe will resolve the Spanish debt crisis,” he said.
Gasoline for October delivery rose 3.85 cents to settle at $2.9425 a gallon on the New York Mercantile Exchange. Prices fell 2.4 percent this week.
Spanish Economy Minister Luis de Guindos is in talks with European Commission authorities to facilitate a new bailout program, the FT reported, citing unidentified officials involved in the discussions. In the U.S., the Federal Reserve last week announced a third round of bond buying to boost the economy.
“It’s not like the sovereign debt crisis in Europe is resolved,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “There’s still hope that all this stimuli will boost demand globally, there’s looming geopolitical issues ahead and traders may be a little loathe to sell the market off.”
Futures were also boosted as shutdowns of gasoline-making units at refineries may reduce supplies. U.S. and East Coast stockpiles of reformulated gasoline, or RBOB, are at a four-year low, according to Energy Department data. Gasoline imports into New York Harbor slid 45 percent last week.
“The refinery issues may be helping products,” Lebow said. “The Harbor is tight and it looks like imports are going to be on the low side.”
Motiva Enterprises LLC will try to restart the fluid catalytic cracker at its Convent, Louisiana, refinery this weekend after failing in one attempt this week, two people familiar with operations said. The unit has been shut since Motiva closed the plant on Aug. 28, the day before Hurricane Isaac made final landfall in Louisiana.
Irving Oil Corp.’s Saint John refinery in New Brunswick shut a fluid catalytic cracker, Genscape Inc. said Sept. 18. The 298,800-barrel-a-day plant exports half of its output to the U.S. Northeast.
“Gasoline has continued to show a reflection of very tight supplies in New York Harbor especially with the down time at the Irving Saint John refinery which is a major supplier into Northeast markets,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Regular gasoline at the pump slipped for a seventh consecutive day, dropping 1.3 cents to $3.833 a gallon yesterday, AAA data show. Prices reached a 2012 high of $3.936 on April 4.
October-delivery heating oil rose 2.32 cents, or 0.8 percent, to settle at $3.1207 a gallon on the exchange, trimming the loss for the week to 3.7 percent.
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